The market may pull back in October, but these brokerages say to keep investing for the long haul; the economic recovery will continue.

Who s Talking: Jeffrey Saut, Chief Investment Strategist and Managing Director of Equity Research at Raymond James

The Gist: Don t be scared off by a significant correction in the market this month. Stocks will still be higher by year-end.

Even though September is historically the worst month in the stock market, October actually looks like it could be more worrisome, says Saut. After a lot of fretting over what would happen to the market last month, September actually turned out to be one of the best months on record, leading many to believe that market performance in October might be better than expected, too. But Saut says he is increasingly confident that the market could see a correction of more than 7% for the first time since the March lows.

The question, according to Saut, is what shape the correction will take, whether it be a fast and furious decline or a dribble-down in a slow-motion melt. And while it may be wise to take on more risk and wind down oversized cash positions, investors may still see a pullback in the short term, warranting more caution in their investing. Even Richard Russell, the renown economic forecaster and publisher of the Dow Theory Letters, has said the counter-trend rally from the March lows is in the process of topping out, and that the fact that the Dow has declined six out of the last seven sessions is one of several well-defined sell signals.

Saut says investors shouldn t necessarily turn bearish without a definitive sell signal, though the odds of a significant correction are rising. Stocks will still be higher at year-end than they are currently, says Saut, and we would be buyers on said correction.

If Mark Twain is any judge, says Saut, October is one of the peculiarly dangerous months to speculate in stocks. But other dangerous months include: November, December, January, February, March, April, May, June, July, August and September.

Who s Talking: Bill Ralls, Senior Vice President, Investment Services, Fidelity Investments

The Gist: Recent economic indicators are mixed, but there are signs that economic growth is accelerating.

The economy is still fragile and there are obstacles that could derail the recovery, but there are many signs pointing to a stronger-than-expected recovery in months to come, says Ralls.

For one thing, job losses were at there lowest level in nine months at the end of September, an indication that the pace of layoffs is winding down. Granted, unemployment could continue to rise even as the economy improves, he says, which could depress consumer spending and the pace of economic recovery. After all, the Conference Board s Consumer Confidence Index fell to 53.1 in September, down from 54.5 in August, as many consumers are still wary about improvement in the job market. And the number of consumers claiming that jobs are hard to get increased to 47% in September from 44.3% in August.

Business activity also surprisingly fell in September, according to the Institute for Supply Management-Chicago, and the Chicago Purchasing Managers Index, an indicator of Midwestern business activity, fell in August to contraction levels.

However, the Index of Leading Economic Indicators (LEI), which forecasts where the economy is headed over the next six to nine months, increased for the fifth straight month in August. And the 3-month rate of improvement in the LEI has been over 8% for the past four months through August, which is a sign of accelerating growth, says Ralls. He points out that similar patterns in the LEI developed after previous downturns, which suggests that we could see a reasonably strong exit from the recession.

Many economists are forecasting a tepid recovery, says Ralls, but investors should remember that according to historical data, the deeper the economic decline, the stronger the ensuing recovery. If this recovery is similar to prior ones, then the economy could have upside surprises over the next year. Even slow steps forward should be viewed as an encouraging sign for investors, says Ralls.